Designing New Market Entry Opportunities to Advance System-level Growth Plans

A leading health system engaged ECG to evaluate new market entry opportunities in a southeastern where it had a long-term presence but held only a minor market position. The system wanted to become a tertiary and quaternary destination center. ECG prioritized locations for consideration, analyzed high-value target markets, and developed market entry strategies.

A nationally recognized health system had developed a new hospital in a rapidly growing southeastern state but had not achieved its desired market position, despite a 30-year presence in the state. It had recently acquired several small community hospitals but needed a more robust strategy to achieve its expansive growth initiatives for select tertiary and quaternary services. The health system wanted to better understand various regional markets to appreciate their nuance as a precursor to designing a statewide delivery network. The system was willing to entertain all forms of market entry scenarios, including build, buy, and partner considerations.

ECG’s first objective was to identify potential markets across two primary filters: socioeconomic characteristics and competitive dynamics. Once the prioritized list was developed, detailed analytics focused on the market characteristics, competitor dynamics, payer dynamics, and future demand projections. ECG also developed market entry targets and thresholds for success. 

We identified a short list of regional markets and potential hospitals to acquire. Each market opportunity was vetted across specific criteria, including delivery network scale, market position, primary care network size, financial situation, and likely competitive response. ECG worked closely with local and system leadership to develop and vet the plan from entry to execution.

ECG recommended that the health system forgo regional expansion elsewhere in the state and focus on expansion in areas adjacent to its own region, which was deemed the most attractive in the state. ECG then advised the health system on a strategy to build both its inpatient and ambulatory network, on and off campus, to achieve its desired growth. ECG’s advanced data-driven approach drove strategic recommendations for entry into three major locations, prioritized and phased based on enterprise-level criteria. The ECG team provided detailed network design strategies to enable the system to accomplish its growth and financial targets, increasing its specialty base considerably and dramatically increasing its primary care base through organic growth and partnership. The clinical identities of each network asset were defined at the service level, including a detailed understanding of the high-complexity care volume flow in the future under the new network design.